April 26, 2010

Schwab to Link to J.P. Morgan's Fixed-Income Securities

Alliance will expand choices for advisors and clients

Charles Schwab clients will now have access to J.P. Morgan's fixed-income securities, including new-issue and secondary municipal bonds, corporate debt securities and non-convertible preferred securities, via an alliance announced this week between the two firms.

The agreement makes new issue and secondary fixed-income securities from J.P. Morgan available to Schwab's 7.8 million client brokerage accounts and makes Schwab a preferred retail dealer for J.P. Morgan. Also as part of the agreement J.P. Morgan will provide Schwab clients with access to research on fixed-income markets and the economy.

"We're very pleased to be working with J.P. Morgan, a leading fixed-income underwriter, to provide Schwab clients with significantly expanded access to initial bond offerings and award-winning research," Walt Bettinger, Schwab's president and CEO, said in a press release. "Investors today are focused on managing their risk with an eye on the tax implications of their investment strategies. As a result, more and more Schwab clients are investing in fixed income, with a particular emphasis on municipal bonds, making this an ideal time to expand our clients' access to an inventory of municipal and corporate bonds through an industry leader like J.P. Morgan."

"Joining with Schwab will enable us to offer our fixed-income issuer clients access to one of the largest brokerage platforms in the country," added Jes Staley, CEO of J.P. Morgan's investment bank.

For Schwab, the arrangement is aimed at providing fixed-income solutions to investors and independent advisors for portfolio stability and income-generation. J.P. Morgan is the top overall debt underwriter and one of the top three municipal issue underwriters in the U.S., and is especially strong in the states where Schwab client desire for municipal securities is greatest. In 2009, J.P. Morgan underwrote $517 billion in the global debt markets and approximately $70 billion in the U.S. municipal bond markets, according to Thomson Reuters.

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